The private Ronald Reagan Boyhood Home Foundation owns the Dixon, Ill., house where Reagan lived in the early 1920s.
The new law authorizes the Interior Department to acquire the site from the foundation, which would continue managing and operating it.
Supporters say the law will protect the legacy of America's 40th president by putting the home under National Park Service jurisdiction.
House Speaker Dennis Hastert, R-Ill., the sponsor, was in the Oval Office with Bush for the bill signing. The home is in Hastert's district.
Hastert fought attempts by lawmakers, the Bush administration and the National Park Service to delay action on the bill until an Interior Department study was completed. In October, a House committee rejected an amendment by Rep. Joel Hefley, R-Colo., to require the study.
Hefley had criticized the effort to designate the site as a national park unit "without study by the park service or indeed any real idea of what the park service's role in this will be."
Reagan lived in the home between the ages of 9 and 12.
Reagan, who celebrated his 91st birthday on Wednesday, is the oldest-ever living former president.
In at least 24 states, his birthday has been recognized as a special day of remembrance.
In addition, the Governors of Nebraska and Illinois and the Vermont legislature declared February 6th as a permanent day of remembrance for Ronald Reagan.
"I am pleased with the overwhelming support that states displayed in honor of President Reagan. Twenty-two years after he was first elected, admiration for Reagan is still growing," said Grover Norquist, Chairman of the Reagan Legacy Project.
"Twenty-four states acted in a bi-partisan manner to remember the legacy of a President who defeated the Soviet empire, re-built our military and gave America the longest period of economic prosperity. This is a powerful display of affection toward a former President," Norquist added.
Reagan lives in Los Angeles with his wife, Nancy, and has rarely been seen in public since announcing in 1994 that he has Alzheimer's.
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